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BPP F7 Text Exam Questions – No. 20

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › BPP F7 Text Exam Questions – No. 20

  • This topic has 0 replies, 1 voice, and was last updated 13 years ago by Anonymous.
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  • June 9, 2012 at 2:49 pm #53271
    Anonymous
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    • Topics: 23
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    • ☆☆

    I believe part of the answer is wrong.

    The answer calculates the the annual depreciation charge using as the total cost of the lorries less the scrap value, divided by the expected lives of 4 years (as given in the question), totalling £12,500 per year.

    However the lease is a 3 year lease, and the treatment described in the notes is to depreciate the asset over the shorter of:

    The lease term, or
    The assets expected useful life.

    So, I believe it should be depreciated over 3 years at £16,667 per year.

    If someone would like to check themselves and let me know if they agree that would be great.

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